Interference with Potential Gratuity Qualifies as Adverse Action

By Kathryn P. Roberts
2/3/2014

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Two black former cocktail waitresses at an Illinois casino may proceed with race-discrimination and retaliation claims under Title VII of the Civil Rights Act of 1964, but they failed to raise a triable harassment claim, the 7th U.S. Circuit Court of Appeals ruled. The plaintiffs alleged they received less favorable treatment in assignments, resulting in reduced tips and unequal discipline and benefits compared with what similarly situated white employees received.

The plaintiffs had been with Casino Queen for 15 years or more. Once they achieved seniority for purposes of bidding on shift assignments, both were able to secure shifts in the higher-tipping areas on the casino floor. If a cocktail waitress was absent for a particular shift, however, the floor assignments were changed and areas reassigned. The plaintiffs alleged that almost every time they were taken off their shifts, they were reassigned to a less-desirable area in the casino, while their more desirable shifts and floor areas were reassigned to less-senior white cocktail waitresses. The women claimed that this happened up to twice a week and that the reassignments resulted in decreased opportunities for tips, which made up between 40 percent and 73 percent of their income.

The plaintiffs also asserted that they were disciplined more harshly for infractions such as tardiness, unauthorized breaks and bringing food onto the casino floor. Further, they were denied requested time off and not allowed to work after giving two weeks’ notice, in contrast to the more permissive treatment afforded their white counterparts. Despite numerous internal complaints, Casino Queen took no action to remedy the inequitable treatment and even disciplined one of the plaintiffs for complaining about floor reassignments.

The District Court for the Southern District of Illinois granted summary judgment for Casino Queen on all three claims, concluding that the plaintiffs had not suffered an adverse employment action, thereby dooming their race-discrimination and retaliation claims.

On appeal, the 7th Circuit disagreed with the trial court’s conclusion, finding that there was enough evidence to go to trial on the question of whether an adverse employment action had occurred. The 7th Circuit held that the floor reassignments constituted a “significant change in benefits” even though the tips were paid by customers, not the casino. It reversed the trial court’s conclusion that the black waitresses could not maintain a discrimination claim because their alleged lost income was too speculative, since they did not give a firm figure for the lot tips and the reassignment affected only their “potential for tips,” not actual wages. Instead, the appellate court found that the plaintiffs’ estimates of their lost tips, “based on their extensive experience,” presented enough evidence to go to trial.

The court of appeals also rejected Casino Queen’s claim that the reassignments were made under “prearranged floor plans,” determining that the actual plans were inconsistent with the business’s actions. It questioned, too, the neutrality of a reassignment plan that routinely upgraded white cocktail waitresses to more lucrative areas and downgraded black ones with seniority to undesirable areas. The court concluded that this raised a question of fact as to pretext that could be decided only at trial.

On appeal, the 7th Circuit affirmed the trial court’s conclusion on the harassment claim, finding that although the work environment may have been subjectively offensive to the plaintiffs, it “did not quite rise to the level” of being “objectively offensive.” The environment was not physically threatening or openly racist, and it did not unreasonably interfere with the plaintiffs’ work performance.

Alexander v. Casino Queen Inc., 7th Cir., No. 12-3696 (Jan. 8, 2014).

Professional Pointer: Employers should take care in fashioning any and all policies that affect an individual’s compensation, particularly where they appear to have results that unduly affect a protected class of employees (race, sex, age, national origin, etc.) or run counter to seniority (if seniority is a factor in the employer’s assignments). Employers risk exposure for a variety of claims if their policy produces illogical results or adversely affects employees in any protected class.

Kathryn P. Roberts is an attorney in the Portland, Ore., office of Ogletree Deakins, an international labor and employment law firm representing management.

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